Rethinking Retirement (RIP) and FIRE


By Dale Roberts, cutthecrapinvesting

Special to the Financial Independence Hub

Today’s post will weave together retirement as seen in a more traditional sense and those who practice F.I.R.E. – an acronym for financial independence and retire early. In the Globe and Mail Brenda Bouw offered that the COVID pandemic is giving early retirees second thoughts, they’re going back to work. On FiPhysician, Dr. David Graham offers that traditional retirement is dead – RIP. The old approach will fall on its face. We might run out of money before we run out of time. We will also see how Justwealth has crushed mutual funds over the last five years. Enjoy. We’re rethinking retirement on the Sunday Reads.

We’ll start with rest in peace RIP retirement on FiPhysician. Or, is retirement an acronym? Of course on this site Dr. Graham inspired – how does the pandemic end?

Well, with the common cold.

We no longer work til we drop dead

That retirement piece shows how retirement risks have changed. We are no longer working until we drop dead Dr. Graham offers. We are living longer (generally are much more healthy) than past decades and centuries and we will spend decades in retirement. The traditional retirement funding approach used by our parents and grandparents will not get the job done. Traditionally, social security (CPP in Canada) a pension and home value would do the trick. That requires a re-think offers Dr. Graham.

For starters those government pension won’t keep up with ‘real inflation’ compared to what the government reports. Lots of fudging of ‘official’ numbers on that front.

So, with the three-legged stool of traditional retirement, you cannot keep up with inflation over longer periods of time. Retirement is an anachronism because you cannot fund it.

On the future of retirement and how we might best prepare …

Consider that which is currently changing the world of employment: smart phones and the gig economy.

You won’t retire in the future; you will monetize your hobby and have gigs from your smart phone. After all, we must move from a knowledge-based society to a wisdom-based one. Everyone has knowledge at the tip of their fingers all the time. Who has all the wisdom?

So funny, as I am personally living that now, and by design. I am living proof as are many in today’s new normal for “retirement”. I have the portfolio, I monetize any knowledge or wisdom that might have value. Any gov pension will be a bonus that will not be counted on in any meaningful way. We have real estate.

Protect the portfolio from inflation

I am also of the school that we can protect our portfolio income assets from inflation. And research shows that we need the true inflation fighters such as gold and other commodities and real assets.

You’ll find that approach demonstrated in the new balanced ETF portfolio.

Also very relevant to all of the above, John Mauldin reports on the missing human capital (aka workers) in the U.S. That post offers some interesting charts and insights on who is finding work, leaving work, and redefining what is work.

And you’ll find some labour and employment charts in Charlie Bilello’s 6-chart Sunday.

The F.I.R.E gang heads back to work

In the Globe and Mail (paywall), Brenda Bouw offers a great piece on how many of the F.I.R.E. gang are re-thinking that early retirement decision. And certainly the pandemic has redefined how we work, and has opened the door to new kinds of work.

But mostly that post demonstrates that we need to have a life plan for retirement and early retirement (especially perhaps). Too much time on our hands can be boring, even depressing. Retirement can lack purpose if not planned well. Life needs purpose.

As I offered on Linkedin, in 2018, we might combine work with a purpose. Instead of leaving work we might discover the joy of work. And part-time work of course  if desired.

From that Globe post, we hear the story of Eric Chang who retired early at the age of 31.

But after a few months of being retired, Mr. Chang got bored and eventually depressed doing little more than spending his days cooking meals from scratch, exercising and hanging out.

“People talk about a mid-life crisis. I was experiencing a quarter-life crisis,” he says. “My entire purpose before was to work hard, so I can make enough to have the freedom I wanted. Then I had the freedom, and I didn’t have a purpose for it. It was painful for a while. I didn’t know what to do with all of that time.”

A ‘quarter life crisis’. I love that term. And that will be the reality for many who do not create a life plan to go along with that financial plan.

Mr. Chang is not an isolated case. I read of many early retirees heading back to work, with work that takes many shapes.

More Sunday Reads

On My Own Advisors Mark writes about the wonderful hybrid combination of investing in individual stocks and ETFs. That appears to be the norm for the Canadian self-directed investor and certainly for personal finance and investment bloggers.

I like Marks’ stock list. It is bang on with the Canadian Wide Moat stock approach that I often write about. I had another look at Wide Moat stocks on Million Dollar Journey.

I offered a very meaty post for my MoneySense weekly – Making Sense of the Markets. A few recent studies show that there is a correlation (and vicious circle) between perpetually low rates and inequality. Maybe monetary policy should be on the table in the current Canadian federal election? Demographic trends are also in the mix, and in that MoneySense post. I also look at the Bank of Starbucks, and an interesting U.S. stock list.

On Findependence Hub, courtesy of Steve Lowrie a very good post on tax strategies to boost your financial savings.

On MoneySense Jon offers how to use ETFs to cultivate financial independence.

There’s great times and more passive income (including rooftop solar energy earnings) on Passive Canadian Income.

From growing dividends to growing your own vegetables

Here’s a nice diversion, Bob at Tawcan offers the harvest from his home and kitchen garden. Wonderful. I also love digging in the dirt and cutting grass. I’ve turned that into another side gig.

Justwealth beats the crap out of mutual funds

And no surprise on that beat. Here’s a look at 5-year returns, bank mutual funds vs Justwealth Portfolios.

As a backgrounder here’s my review of Justwealth. That’s the robo advisor that knows when to get personal. They are also THE choice for RESP portfolios in Canada IMHO. The smart way to invest in the RESP in Canada. They offer target date funds that adjust the risk level as the student approaches the need for the funds.

As expected, it’s not a fair fight.

I’ll be back with a dedicated post on Justwealth and other Robo’s versus high-fee mutual funds. It’s a no brainer.

Thanks for reading. We’ll see you in the comment section. Have a great Sunday.

From the lovely island – P.E.I. It’s my last day here. Very sad. I will greatly miss my daughter and the island.

And don’t forget to check out the Canadian Financial Summit 2021. I am in the mix, and will be discussing investing in bitcoin.

Dale Roberts is the Chief Disruptor at A former ad guy and investment advisor, Dale now helps Canadians say goodbye to paying some of the highest investment fees in the world. This blog originally appeared on Dale’s site on Sept. 5, 2021 and is republished on the Hub with his permission.

Leave a Reply